Domino’s Pizza Group PLC. Serves Up Strong Third Quarter

pizzaDomino’s Pizza (LSE: DOM) this morning published an interim management statement for the third quarter, to 28 September 2014, in which it says its UK performance for Q3 has been “strong”. Its share price is currently up 1.7% in trading so far this morning.

Total UK system sales rose 17.6% over the quarter, to £165.7m, and with Q3 like-for-like sales up 12.9% the company reports that it’s now recorded a fourth successive quarter of double-digit growth in like-for-like sales.

The strong UK performance is attributed to the improved economy, continued promotion of “meal deals” and migration of customers to on-line ordering, with its higher ticket.

Indeed, Domino’s says that 70.9% of delivered sales during Q3 were placed on-line, up from 62.4% in the same period of 2013, with almost 50% of on-line orders being placed using mobile devices, up from just under 34% in Q3 2013.

The company reports that 13 new UK stores were opened in Q3 and says that it remains on target to open 40-50 stores by the end of this year.

Internationally, Domino’s says that Q3 saw the best return-on-investment of any quarter so far in 2013.  Switzerland experienced an “excellent quarter” — system sales were up 14.9% — and the company say that it’s confident of seeing profitability in that country in quarter four.  

And whilst system sales in Germany were down 11.4% for the quarter, with a 9.9% fall like-for-like, Domino’s says that it’s continuing to transform its German business, and that it has “moth-balled” a number of poorly performing outlets, leaving it with 11 corporate and 11 franchised stores. 

Commenting on the third quarter statement, CEO David Wild said:

We are delighted with the like-for-like performance in our core UK business and remain on track for our targeted new store opening programme.  We are building on our success on-line with the roll-out of our new website and a series of enhancements to continue to make it easy for our customers to order Domino’s.

“Progress in Germany is slower than we would have liked, but we are committed to the execution of our strategy.  Our performance in Switzerland is encouraging.

“We face more challenging comparatives for the final quarter, but we remain confident of a satisfactory outcome for the year and are planning to build on this success in 2015.”

At 579.3p, Domino’s share price has gained 13% so far this year, versus a 3.3% fall in the value of the FTSE 100 index.  And the story is repeated over the past five years, with the pizza company’s share price up 96%, leaving the FTSE 100 trailing with a rise of just 31%.

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Jon Wallis has no position in any shares mentioned. The Motley Fool UK has recommended Domino's Pizza. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.